June 24 (Bloomberg) -- Italy’s Davide-Campari Milano SpA is
trying to put some fizz back in its shares by getting people
like Gillian Cowan to try a glass of bubbly orange tipple.

Cowan, a 30-year-old Londoner who works in retail
marketing, had her first Aperol Spritz last month when friends
ordered the drink on a night out in Soho, one of the trendy
areas Campari has targeted. Despite its cachet, the bitter
concoction -- a mélange of Campari’s herbal Aperol, sparkling
prosecco, and soda -- wasn’t to her taste.

“Maybe it’s a drink I would like if I was more
sophisticated, or had a yacht on the Amalfi coast,” she said.

Cowan’s Aperol aversion shows the difficulty Campari faces
in making the spritz Europe’s go-to drink this summer to offset
turmoil in the Milan-based company’s home market.

Aperol has accounted for more than a third of growth at the
maker of Skyy vodka and Wild Turkey bourbon since Campari
acquired the brand a decade ago. Last year sales of Aperol fell
for the first time in at least five years amid Italy’s economic
slump and a pricing dispute with a big German retailer that took
Aperol off shelves.

“Aperol’s been by far the biggest contributor to Campari
of any brand,” said Jamie Isenwater, an analyst at Deutsche
Bank in London. “Its recovery is dependent on how effectively
they can win back consumers in Germany. In the longer term, it’s
also about rolling it out to new territories.”

Billboard Recipe

Aperol comprises 11 percent of Campari’s revenue of 1.3
billion euros ($1.8 billion), and its decline has dragged down
the shares, which have lagged behind those of Diageo Plc,
Pernod-Ricard SA and Remy Cointreau over the past 12 months.

The distiller now trades at a 16 percent discount on a
price-to-earnings basis to the FTSE MIB, Italy’s benchmark stock
index, after commanding a premium of as much as 160 percent over
the past three years.

Campari has responded by ramping up advertising in its main
markets of Germany, Italy and Austria. In new regions like
Britain and Spain, the company is working with bartenders to
introduce drinkers to Aperol and has plastered both countries
with billboards that illustrate the right way to make the
flagship cocktail.

While most of Europe is just getting introduced to Aperol,
it’s been a northern Italian staple since its creation in the
city of Padua in 1919. It’s usually consumed as an aperitif of
three parts prosecco, two of Aperol and a splash of soda over
ice with a slice of orange. The spritz’s low alcohol content,
slightly less than a glass of wine, makes it an alternative to
beer.

Piazza Treat

“The drink is extremely social,” said Campari Group
marketing director Andrea Conzonato. “It’s about getting
together in the piazza before dinner.”

Italy’s taste for spritzes is a legacy of Austria’s
influence over the north of the country, Conzonato says. The
word “spritzer” comes from the German verb “spritzen,” to
squirt, and consumers in the region adopted their northern
neighbors’ habit of blending bitter spirits with local sparkling
wines. The drink’s strong flavor, though, makes it a tough sell
outside central Europe, said Trevor Stirling, an analyst at
Sanford C. Bernstein in London.

Negroni Cocktail

Sales fell 16 percent in Germany last year after Aperol was
pulled from the shelves of a retailer, said by Deutsche Bank to
be discounter Lidl. The retailer refused to go along with a
price increase that Campari wanted. While Aperol is now back in
some Lidl stores, cheaper alternatives that sell for 30 percent
to 40 percent less than Aperol’s 10-euro price tag have taken
market share. Campari confirmed the details of the dispute
without naming the retailer. Lidl didn’t respond to an e-mail
seeking comment.

One bright spot for Aperol is Japan, Conzonato said. Sales
there and in other secondary markets like Australia and the U.K.
increased 45 percent last year, versus a 7 percent decline in
Italy, Germany and Austria. Campari is also eyeing Brazil,
Australia and Argentina. The U.S., the world’s most profitable
spirits market, will take longer, as spritzes aren’t a popular
pre-dinner libation.

Those new markets will help stop the bleeding, yet Aperol
won’t ever get back to its previous growth rates, according to
Barclays Plc. Analysts there expect sales to rise 10 percent to
12 percent a year.

Nick Robinson, 36, a marketing manager in London, couldn’t
help but stumble across the Aperol Spritz while on holiday last
year in Venice, where the drink offered a refreshing alternative
to his usual Negroni -- a gin, vermouth and Campari cocktail.

Fierce Drink

Campari should have luck pitching Aperol to drinkers like
Robinson who are in the mood for a slice of Italy. At Polpo,
which sells Venetian food in three London locations, sales of
Aperol now top Campari, Aperol’s better-known cousin, according
to managing director Luke Bishop.

The restaurant trains its bartenders to make the spritz and
features it on menus. At its Covent Garden location, Polpo has a
dedicated Aperol bar with exposed lightbulbs and framed Campari
ads. It even puts its own spin on the cocktail, serving it
Venetian-style with an olive and lemon rather than an orange
slice.

“It’s a very nice effect seeing it in the restaurants,”
Bishop said. “You sell one or two, and then every table starts
looking and asking, ‘What’s that orange drink?’ ”